LONDON, March 25 (Reuters) - The BBC said on Wednesday it would not renew the contract of Jeremy Clarkson, the hugely-popular but divisive presenter of its motoring programme "Top Gear" after what it called an unprovoked physical attack on a producer.

Clarkson, 54, who has generated both controversy and profits for Britain's publicly funded broadcaster, was already on a final warning over accusations last year that he had used racist language while filming the show.

"It is with great regret that I have told Jeremy Clarkson today that the BBC will not be renewing his contract," Tony Hall, the BBC Director-General, said in a statement.

No comment from Clarkson was immediately available.

Top Gear, which is aired in more than 200 countries, is one of the BBC's most profitable shows but its lead host, a friend of Prime Minister David Cameron, has offended, among others, environmental groups, mental health charities and cyclists with his forthright manner.

Last October the show sparked a diplomatic incident between Britain and Argentina, two countries which went to war in 1982 over the Falkland islands.

A Top Gear television crew was forced to flee Argentina after driving a Porsche 928 GT with the registration number H982 FKL - which some people suggested could refer to the Falklands conflict.

Hall said he had not taken the decision lightly, and that he remained a great fan of Clarkson, whom he described as a "huge talent".

"I know how popular the programme is and I also know that this decision will divide opinion," he added.

More than a million people from around the world signed an online petition calling for the BBC to reinstate Clarkson after he was initially suspended.

In a report, the BBC said producer Oisin Tymon was subject to an unprovoked physical and verbal attack by Clarkson at a hotel in northern England earlier this month, which left him with swelling and bleeding to his lip.

"The verbal abuse was sustained over a longer period, both at the time of the physical attack and subsequently," the report said, adding the abuse included strong expletives and threats to sack Tymon.

After the attack, the report said, Tymon was understood to have gone to hospital for a check-up.

Clarkson reported the incident himself and the report said it was not disputed by the presenter or any witness that Tymon was the victim of an unprovoked attack. (Reporting by Stephen Addison; editing by Michael Holden)